The challenges of delivering crop insurance in India are well known. The main issue is the sheer number of farmers: The last Agricultural Census in 2010-11 put the total operational holdings in India at 138.35 million, with an average size of 1.15 hectares. Traditional indemnity-based insurance is too costly when farms are so small, fragmented and remote for loss assessors to come and physically verify crop damage claims.

One way out could be weather-based insurance, in which there is no loss assessment at individual field level. Instead, payouts are linked to measurable parameters such as rainfall, day and night temperatures, and relative humidity. Any significant deviations from normal in these parameters over the cropping cycle — deficient rainfall in July-August just after kharif sowings are over, or a sudden rise in March temperatures when wheat is in the grain-filling stage — automatically trigger payments to all farmers in the particular area. Such insurance, however, cannot provide compensation for losses not directly attributable to weather, especially those relating to pest and disease attacks. The fact that not all farmers in an area follow uniform planting and harvesting dates even for the same crop further complicates matters.

Yet another option is to rely on yield estimates from crop cutting experiments (CCE). Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), the insurance unit is the village panchayat, with all covered farmers in that notified area eligible for payouts when crop yields fall below a specified average threshold. The yields are based on CCEs — a minimum of four in every village panchayat for each crop — carried out by state governments and to be submitted to insurance companies within a month from the final harvest. The sheer enormity of the task — covering the country’s 2.5 lakh-odd panchayats means 10 lakh CCEs in a single season and many more if more than one crop is grown in the same village or even by the same farmer — has been the single biggest stumbling block to the success of the Narendra Modi government’s flagship crop insurance scheme (see https://bit.ly/2LjVauh).

This is where technology-enabled solutions can make a difference. The International Food Policy Research Institute (IFPRI) has developed WheatCam, a picture-based insurance (PBI) app that farmers can download on to their smartphones. The app can be used to take pictures of their fields at regular intervals just before and through the cropping season, from sowing to harvesting. These pictures get automatically uploaded to an online server of the insurance company. The company can then, instead of sending claims officers to individual farmers’ fields, appraise the crop losses by simply processing the smartphone pictures. Since the pictures are taken through the app, they cannot be edited or photoshopped, and nor can farmers upload from their phone photo galleries.

PBI can, in short, provide insurers eyes on the ground at substantially lower costs than deploying loss assessors, even while involving farmers directly in the exercise. IFPRI, in the 2016-17 rabi season, undertook a project enlisting the participation of 592 farmers in 50 villages of six districts: three in Punjab (Ludhiana, Fatehgarh Sahib and Patiala), and three in Haryana (Sirsa, Fatehabad and Yamunanagar). These farmers were enrolled in October 2016, a month ahead of wheat planting, and provided insurance for one acre of their crop through HDFC Ergo General Insurance Company. Each farmer had to take an initial overview picture of his insured plot before the start of sowing using the WheatCam app. He was to thereafter take pictures every week — from the exact same location and with the same view angle — throughout the 140-145 day cropping season.

At the end of the season, an independent panel of wheat experts evaluated the time series of geo-tagged pictures from each farmer. Based on the pictures taken and uploaded by the farmers, they, then, assessed whether the crop had suffered any damage and, if so, by what percentage. The expert loss assessments were sent to HDFC Ergo, which made the insurance payouts directly into the farmers’ bank accounts in July 2017 — within three months of harvest.

The interesting part was that the above payouts, based on loss assessment from information contained in the farmers’ time series of pictures, weren’t very different from the actual crop yields measured through CCEs (which were also conducted at the end of the season). Thus, for farmers whose PBI loss assessment was below 20 per cent (entailing no payouts), the average CCE wheat yields were around 20.2 quintal per acre. The yields averaged 18.2 quintal when PBI losses were assessed at between 20 and 50 per cent, while 10 quintals in the high payout category involving losses beyond 50 per cent. IFPRI undertook a similar study for the recent 2017-18 wheat season with about 1,000 participant farmers. The results of it are still awaited.

“At this stage, we can say that PBI offers a new way of delivering crop insurance that is affordable, easy-to-understand and acceptable to both farmers and insurers. Farmers are largely able to follow the picture-taking protocols and quite willing to do so for loss assessment purposes themselves. Agronomists, too, agree that damage to the wheat crop — whether from lodging, hail or common diseases such as yellow rust — can be captured reasonably well through pictures.

PBI payouts also seem well correlated with yields determined through CCE, which unfortunately take much longer time,” says Berber Kramer, Research Fellow (Markets, Trade & Institutions) at IFPRI. A future objective of the project is to build image-processing algorithms, instead of relying only on expert loss assessment. “If you were to implement PBI on a national scale, it would require processing of millions of pictures uploaded by farmers. That can only be done using automated tools,” she notes.